Sources say cuts will be former Nokia personnel, plus engineering and marketing.

According to a Bloomberg report, Microsoft is preparing to undergo a significant staff reduction, potentially shedding as much as five percent of its employees around the world.

Citing "people with knowledge of the company’s plans," Bloomberg elaborates that the cuts—which could exceed 5,800 people—will be made public potentially some time this week and will focus on areas of the company that were acquired from Nokia, as well as some marketing and engineering groups. The report specifically notes that some of the cuts "will be in marketing departments for businesses such as the global Xbox team."

Microsoft’s current headcount is just north of 127,000, counting the 30,000 employees added during the acquisition of Nokia’s handset division earlier this year.

The rumored layoffs are part of CEO Satya Nadella’s restructuring plan, which aims to change Microsoft’s overall direction away from "devices and services" and instead point it toward a different target—one described as "mobile first, cloud first" and that so far only Nadella himself seems fully sure of. Microsoft’s overall commitment to its consumer and enterprise customers appears solid, and the Xbox platform seems similarly safe—although purported layoffs in the global Xbox marketing team would be further acknowledgement of the almost comically bad messaging problems that have plagued the Xbox One since its launch.

Microsoft will announce its 2014 4Q earnings results on July 22 (the company’s fiscal year runs from July 1 to June 30), and Nadella is expected to elaborate more on Microsoft’s direction—and on any potential layoffs—at that time.

Lee Hutchinson
Lee is the Senior Technology Editor at Ars and oversees gadget, automotive, IT, and culture content. He also knows stuff about enterprise storage, security, and manned space flight. Lee is based in Houston, TX. Emaillee.hutchinson@arstechnica.com//Twitter@Lee_Ars